Call: +1-972.503.6525 | | Register for Free | Contact | Get Sample Data

Africa’s Free Trade Deal Finally Comes to Life

The first goods will begin to flow under an Africa-wide free-trade pact on Friday, the culmination of more than five years of negotiations on cutting cross-border tariffs. The accord comes to fruition at a time when trade tensions are rising across much of the rest of the world. The 55-nation Africa Union (AU) will mark the occasion in a ceremony that comes just hours after the UK leaves the European Union’s single market and a new post-Brexit trade agreement enters into force. Africa could be the world’s biggest free-trade zone by area when its treaty becomes fully operationally by 2030. The bloc has a potential market of 1.2 billion people and a combined gross domestic product of $2.5-trillion. Intra-African trade fell to 14.5% of the total in 2019, from 15% the year before. The free-trade pact could bolster the proportion to 22%, and commerce within the continent could rise to more than $231 billion even if all other conditions remained unchanged, the African Export-Import Bank said in report published on December 15. Internal shipments accounted for 52% of total trade in Asia and 72% in Europe, according to Afreximbank data. The accord seeks to lower or eliminate cross-border tariffs on most goods, facilitate the movement of capital and people, promote investment, and pave the way for a continent-wide customs union.

The Africa Continental Free Trade Agreement (AfCFTA) which was finalized at the virtual African Union Summit in December, is an important milestone for the realization of the AAAM’s vision of building a successful automotive ecosystem which will lead to a sustainable industry that creates significant jobs and assists in the industrialization of the auto sector for Africa.

SET TO INCREASE INTRA-AFRICA TRADE MORE THAN 50%
AAAM applauds the African Union for pioneering and launching the African Continental Free Trade Area on 1 January 2021; this will ultimately become the world’s largest free-trade bloc covering a market of initially more than 1.3 billion people and up to $3 trillion (about R45.9 trillion) dollars in GDP with the potential of increasing the intra-Africa trade by more than 50%.

The establishment of the AfCFTA is necessary and opportune considering the unprecedented population growth, the high proportion of youth, and the growing middle class.

CHANCE TO SHAPE CONTINENTAL AUTOMOTIVE POLICY
“The secretariat of the AfCFTA has the unique opportunity of shaping a continental automotive policy with countries that are willing to participate in the industrialization of the auto sector,” said CEO of AAAM, David Coffey.

“The AAAM is fully committed to supporting the secretariat in realizing the vision, of creating demand and production for 5m new vehicles per annum from the 2019 level of 1.1m.

This growth requires the implementation of progressive automotive policies and eco systems across the continent, where hub countries in regions will assemble vehicles supported by surrounding economies sharing in the value chain; ultimately regional markets will trade vehicles and components.

“Country and regional partnerships are not new to the development of the auto industry around the world” said Coffey.

AFCFTA RULES OF ORIGIN TO BE CONCLUDED IN MID-2021

“It is anticipated that the Rules of Origin for the automotive industry will be concluded by mid-2021, thus paving the way for real industrialization of the sector across the continent.

“Effective industrialization is fundamental to the journey of becoming competitive and to the subsequent liberalization of tariffs across Africa – the AfCFTA will provide the scale that is required for industrial competitiveness,” concluded Coffey.

Source – africa.com

Our Partners

Microsoft
Microsoft Azure
DataCamp
Codesign Technologies, Canada
CodeWizards
Nakiso Borehole Drilling
Finviz Stock Scanner
Stock Charting Platform

Featured Advertisers

Codesign Technologies, Canada Queen Centers For Hope
Ndeipi MuDiaspora Jules Travel and Tours
JB Dondolo, Inc. Chef Gwanz
DataCamp
Nakiso Borehole Driling Finfiz
TradingView Stock Charting Platform